House overhauls construction-defect rules, creates voluntary multifamily incentive program to spur condo building

The House on March 28 passed House Bill 12 72 after a series of technical and policy amendments designed to encourage construction of attached multi-unit housing while preserving homeowners’ ability to seek repairs and damages.

Nut graf: The Transportation, Housing and Local Government Committee and floor sponsors rewrote portions of the bill during stakeholder negotiations, removing a rigid dollar cap on projects and replacing it with a voluntary multifamily construction incentive program. That program invites home builders to opt in by offering third‑party inspections and express warranty packages in exchange for limited procedural protections and a streamlined settlement process.

What the bill changes - Replaced an initial market-cap approach with a voluntary multifamily construction incentive program aimed at duplexes, triplexes, quads and condominium buildings to encourage more for-sale, owner-occupied stacked housing. Committee members said the change was recommended by builders and homeowner advocates during negotiations. - Required third‑party inspections for participating projects and clarified who may serve as a qualified inspector; sponsors said that change came after stakeholder requests to ensure inspection competence. - Moved certain procedural settlement requirements and an award-of-attorney‑fees mechanism into a program-specific section so that the more limited attorney-fee exposure applies only to the voluntary program rather than to all construction-defect claims statewide. - Clarified statute-of-limitations and statute-of-repose tolling for mitigation efforts, and created an affirmative-defense carve-out for extraordinary human-caused events (for example, terrorism or war).

Why sponsors say the changes matter Representative Byrd, who shepherded the bill through committee, said the package is designed to get defects fixed early and avoid litigation when possible. "One goal of the bill is to get issues fixed early and before needing the litigation system," Byrd told the House, and amendments were aimed at clarifying what information builders and homeowners must exchange during pre‑suit settlement talks.

Debate and support Supporters stressed the state’s shortage of for‑sale, middle-market condominiums and argued liability pressure and insurance withdrawal have constrained condo construction. Several lawmakers, including Representatives Burton and Gonzales, argued the reforms would encourage builders and insurers back into markets producing starter homes and owner-occupied multi-family housing.

Opposition and caution Some members said the bill does not erase all litigation risk for builders, and a few consumer advocates urged tighter protections for homeowners whose units develop defects. Sponsors acknowledged the bill is a step in a longer push to restore insurance availability and to increase the practical supply of owner-occupied housing.

Process, amendments and outcome The bill carried many amendments on the floor (L022 through L032 in the transcript); changes addressed the program’s voluntary nature, eligibility and administrative procedures, document‑sharing rules in settlement talks, and the scope of attorney‑fee awards. Committee report as amended was adopted, and the full House passed the measure.

Ending Lawmakers portrayed HB 12 72 as a policy compromise crafted with builders, homeowner groups and local governments to rebuild a market for owner-occupied multifamily housing while retaining remedies for homeowners. Sponsors urged the Senate to keep work going to refine implementation details.